Medical & Diagnostic Laboratories
Description
Companies in this industry provide analysis and diagnostic services by examining body fluids and producing images of the body for medical professionals and patients. Major companies include Akumin, LabCorp, Quest Diagnostics, and RadNet (all based in the US), as well as LifeLabs (Canada), Sonic Healthcare (Australia), and the clinical diagnostics division of Eurofins (Luxembourg).
As access to health care expands around the world, the need for diagnostic and research laboratory services will also increase. Growth in the industry is impacted by aging populations and rising demand for preventive care and personalized medical treatments.
The commercial medical and diagnostic laboratory industry in the US consists of about 17,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $55 billion.
COMPETITIVE LANDSCAPE
Demand is linked to the number of people receiving medical treatment. The profitability of individual companies depends on efficient operations and good marketing. There are large economies of scale in the operation of medical labs, which can receive samples from a wide geographical area. Small medical labs can compete effectively by providing specialized analyses, or by serving geographical regions with few medical facilities. Imaging centers don't have similar economies of scale because they must be located close to patients, so small firms can compete effectively with large ones in a particular area.
The US medical and diagnostic laboratories industry is fragmented: the 50 largest firms account for less than 50% of revenue.
PRODUCTS, OPERATIONS & TECHNOLOGY
Medical labs (often called "clinical labs") receive specimens of body fluids (most often blood) or tissues collected from patients, and perform a wide variety of tests to determine the presence and amount of various biochemicals. The results assist the doctors in diagnosing and treating medical conditions. The tests performed are often classified as either "routine" or "esoteric/specialty," according to the difficulty of analysis and the frequency of use in medicine. As technology improves and medical knowledge advances, esoteric tests can become routine. Some companies, such as Bio-Reference Labs and Esoterix, (a subsidiary of LabCorp), focus on the esoteric/specialty segment.
Routine tests include cholesterol tests, blood cell counts, pap smears, urinalyses, microbiology cultures, pregnancy tests, HIV tests, and tests to measure the levels of sugar, enzymes, and other chemicals in blood. Such tests are done mainly with highly automated equipment, and results are generally reported within 24 hours. Esoteric tests like gene tests and immunological tests require technicians with advanced training who often use highly sophisticated equipment. Anatomic pathology testing requires the preparation of microscope slides for tissue and cell samples and may include interpretation by pathologists.
The main operational challenges of clinical labs involve collecting and correctly handling a large number of small specimens, mainly in small blood tubes. Specimens can be collected from hospitals, clinics, and doctor offices, and from satellite service centers where patients are sent by doctors to have their blood drawn. Quality control and accurate reporting are major concerns.
Imaging centers operate similarly to a clinic because they schedule appointments with patients, often treat patients with sedatives or contrast agents before a procedure, and may hold patients afterward in a recovery area. Imaging centers may simply forward images directly to the ordering doctor, or may contract with radiologists to interpret the images.
As access to health care expands around the world, the need for diagnostic and research laboratory services will also increase. Growth in the industry is impacted by aging populations and rising demand for preventive care and personalized medical treatments.
The commercial medical and diagnostic laboratory industry in the US consists of about 17,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $55 billion.
COMPETITIVE LANDSCAPE
Demand is linked to the number of people receiving medical treatment. The profitability of individual companies depends on efficient operations and good marketing. There are large economies of scale in the operation of medical labs, which can receive samples from a wide geographical area. Small medical labs can compete effectively by providing specialized analyses, or by serving geographical regions with few medical facilities. Imaging centers don't have similar economies of scale because they must be located close to patients, so small firms can compete effectively with large ones in a particular area.
The US medical and diagnostic laboratories industry is fragmented: the 50 largest firms account for less than 50% of revenue.
PRODUCTS, OPERATIONS & TECHNOLOGY
Medical labs (often called "clinical labs") receive specimens of body fluids (most often blood) or tissues collected from patients, and perform a wide variety of tests to determine the presence and amount of various biochemicals. The results assist the doctors in diagnosing and treating medical conditions. The tests performed are often classified as either "routine" or "esoteric/specialty," according to the difficulty of analysis and the frequency of use in medicine. As technology improves and medical knowledge advances, esoteric tests can become routine. Some companies, such as Bio-Reference Labs and Esoterix, (a subsidiary of LabCorp), focus on the esoteric/specialty segment.
Routine tests include cholesterol tests, blood cell counts, pap smears, urinalyses, microbiology cultures, pregnancy tests, HIV tests, and tests to measure the levels of sugar, enzymes, and other chemicals in blood. Such tests are done mainly with highly automated equipment, and results are generally reported within 24 hours. Esoteric tests like gene tests and immunological tests require technicians with advanced training who often use highly sophisticated equipment. Anatomic pathology testing requires the preparation of microscope slides for tissue and cell samples and may include interpretation by pathologists.
The main operational challenges of clinical labs involve collecting and correctly handling a large number of small specimens, mainly in small blood tubes. Specimens can be collected from hospitals, clinics, and doctor offices, and from satellite service centers where patients are sent by doctors to have their blood drawn. Quality control and accurate reporting are major concerns.
Imaging centers operate similarly to a clinic because they schedule appointments with patients, often treat patients with sedatives or contrast agents before a procedure, and may hold patients afterward in a recovery area. Imaging centers may simply forward images directly to the ordering doctor, or may contract with radiologists to interpret the images.
Table of Contents
- Industry Overview
- Quarterly Industry Update
- Business Challenges
- Business Trends
- Industry Opportunities
- Call Preparation Questions
- Financial Information
- Industry Forecast
- Web Links and Acronyms
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